st: Interaction term or Difference in Differences

Hi All:
We have a cross sectional data that has a binary variable indicating
policy P - which is implemented randomly in a a number of states. We
would like to study the effect of P on some variable i.e., wages.
Given we have only cross sectional data, do you think the following
mode specification is ok?
Wages = Beta0+ Beta1*X + Beta2*Policy+Beta3*States +Beta4*Policy*State+epsilon
where X = Demographic variables
Thanks!
Mike
--
"My father gave me the greatest gift anyone could give another person,
he believed in me." - Jim Valvano
--
"My father gave me the greatest gift anyone could give another person,
he believed in me." - Jim Valvano
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